News

When I talk about the disruptive impact of new technology approaches, it is often couched in terms of a new entrant disrupting an existing player. But disruption also occurs from within and it is sometimes even more interesting to hear of technologies that enable this kind of “intrapreneurship” to occur. I recently sat down with Zipwhip, a Seattle-based company that allows existing landline phones to send and receive text messages. The company, which recently raised a $5 million venture funding round, portrays itself as something of a hero of legacy businesses – it lets companies fight back against the threat of disruptors.

I spent time talking with John Lauer, Zipwhip’s CEO about their space. Twilio, another company that is enabling telephony (voice and text etc) via a developer platform has managed to own the bulk of the attention about the space – Twilio has many compelling stories around how their solution is being used by new vendors – perhaps the best example being Uber who uses Twilio to power the communications for its service.

Zipwhip, on the other hand, is perhaps slightly less sexy, but arguably more impactful. Its service allows organizations with an existing phone number to send and receive text messages. That sounds particularly unsexy, but spare a thought for existing organizations. If you’re an operation that has a well known existing phone number, you want to enable some communications via different modalities that doesn’t rely on customers adopting new approaches – people shouldn’t have to download an app, heck, they shouldn’t even need to own a smartphone, to communicate with you.

To this end Zipwhip allows these organizations to send and receive text messages via their existing phone numbers – and the use cases are interesting indeed. Zipwhip has enabled 200 million toll-free and regular landline numbers in the US to send and receive text messages – they do so via direct integrations with carrier systems. Zipwhip charges $19.99 a month for unlimited text messages from a landline and $99 for enterprise accounts, which offer additional services and can be shared among multiple users.

While super-hot startups like WhatsApp grow massive user numbers and gain eye-watering acquisition valuations, Zipwhip’s opportunity is slower growth, but ultimately larger. Lauer’s perspective is that voice communications will always be needed. The primary way of achieving that is through phone numbers. Hence tacking additional services onto that unique identifier is hugely valuable. The reason for this value is that while WhatsApp (and Facebook messaging, Skype and other messaging platforms) are closed systems, voice numbers are open – Zipwhip is tying messaging to an inherently open system.

A few case studies that Lauer told me about:

Call Center, National Restaurant Association: National Restaurant Association started using Zipwhip in their call center in August of 2013. Within the first 3 months of adding texting to their toll free line, they racked up 6,000 text conversations with an 80% decrease in voicemails left by customers calling in. Shorter

Public Safety, Middleton Police Department: The police department in Middleton, Wisconsin added Zipwhip’s text capability to their non-emergency phone line to help manage the flow of people trying to reach the department. In addition to being a safer, silent way for citizens to report suspicious activity or send in tips for crimes, the texting line has been a key factor in solving multiple crimes.

Radio Station, KEXP: Stations all over the country have used texting to engage listeners in contests and music campaigns before, but very recently Zipwhip has broken into the market to personalize the experience for listeners. Instead of just blasting out mass text messages to listeners or having listeners text in generic keywords, radio stations are now discovering that there’s a better way to engage their audience. Listeners are now welcome to text in song request, feedback, and really anything they want to have an actual conversation with the on-air DJ.

Regular Cab Companies: St. Louis County Cab, which is the largest cab company in St. Louis is using the Zipwhip service to enable customers to engage with the company – ordering cabs, cancelling or changing reservations and internal dispatch use can all happen by text.

This last case is interesting – while it is a fact that cab companies have been caught unawares by Uber, the fact is that it would have only taken these companies introducing half of the innovations that Uber has to keep their market share. They’re late, but with the help of Zipwhip they’re finally coming to the party.

Disruption occurs both from within and without – it’s nice to hear stories about how Zipwhip helps existing players fight back.

Lakewest Venture Partners

Lakewest Venture Partners is an affiliate of Lakewest, Inc., a real estate and private equity company located in Chicago. It is led by Buzz Ruttenberg, David Mann and Jonathan McCulloch and was formed to pursue seed and early stage investment opportunities primarily in Chicago. Our investments and participation in companies can range from passive $50,000-$100,000 investments to those in excess of $1,000,000 with board involvement. Our primary investment capital is sourced in-house which makes our decision-making process straightforward and swift. We also operate a fund raised from private investors for additional investment capacity.